Varela, 21, was the first signing of the ill-fated David Moyes era but he has not featured for United's first team since making the move from his native Penarol last summer.

The Uruguayan right-back will be inducted into Real Madrid's Castilla reserve side along with Chilean defender Benjamin Kuscevic and both players will develop their games under the tutelage of coach Zinedine Zidane.

Having spent the majority of his time at Old Trafford playing in Warren Joyce's under-21 side, Varela will be hoping to impress in the Segunda Division B, where Zidane's side have lost their opening two matches.